Data. Domain. Delivery. eclerx. Financial Performance - FY19 Q1 7 th August, 2018

Transcription

1 Data. Domain. Delivery. eclerx Financial Performance - FY19 Q1 7 th August,

2 Financial Summary Revenue Profit Margin Metrics FY19 Q1 Q-o-Q Y-o-Y OPG revenue (USD mm) 49.2 (6) 1 OPG revenue (INR mm) 3,519 (3) 6 Total revenue (INR mm) 3,704 (2) 9 OPM (INR mm) (23) EBITDA (INR mm) 968 (1) (11) Operating EBITDA (INR mm) 783 (3) (22) Net profit (INR mm) 602 (7) (24) OPM () 20 1 (7) EBITDA () 26 (1) (6) Operating EBITDA () 22 0 (8) Net profit () 16 (1) (7) *Operating EBITDA Excludes Other Income, whereas EBITDA includes Total Revenue Q-o-Q USD revenue and margin decline as exceptional short term revenue of Q4 tapered off - Expect trend of YoY $ revenue increase to continue in near term 3 rd consecutive quarter with YoY USD revenue increase; after 5 prior quarters with YoY declines All margin metrics declined YoY; Absolute OPM increased QoQ; Cost optimization to play out in rest of the FY In Q1FY19, company has accounted a total of INR mm under SEIS; giving +ve PAT impact of INR 40.0 mm pertains to FY19 and INR 84.9 mm pertaining to previous financial years Effective Tax rate will increase to ~30 due to completion of 5 and 10 years for various SEZs 1

3 Other Income FY19 Q1 vs. FY18 Q4 Increase in other income primarily due to exchange rate movement Figures in INR millions. Other Income FY19 Q1 FY18 Q4 FY18 Q3 FY18 Q2 FY18 Q1 Investment Income Revaluation and Realised Gain (70.8) Other Misc. Income (4.9) Total Revaluation and Realised Gain USD/INR FY 19 Q1 Exit: vs. FY 18 Q4 Exit: EUR/INR FY 19 Q1 Exit: vs. FY 18 Q4 Exit: GBP/INR FY 19 Q1 Exit: vs. FY 18 Q4 Exit: Note: For analysis purpose we have grouped any (losses) or gain under Other Income, whereas in published financial results any (losses) are grouped under Other Expenses 2

4 Hedge Updates Current Hedge Status Total outstanding hedges now $147.8 mm at average INR 69.3/$; 100 forwards times quarterly revenue vs. average of 2.9 times in preceding 4 quarters Contract Year Amount (mn) Avg. Rate (INR) Total FY19 Q2 $ Total FY19 H2 $ Total FY19 $ Total FY20 H1 $ Forwards Total FY20 H2 $ Total FY20 $ Total FY21 H1 $ Total FY21 H2 - - Total FY21 $ Total USD $

5 P&L Comparison: FY19 Q1 vs. FY18 Q4 Figures in INR millions. Operating P&L FY19 Q1 OPR () FY18 Q4 OPR () Operating Revenue 3, ,611.3 Cost of Revenues Delivery and Support Employees Cost 1, , General and Administrative Expenses Facilities (Rent and Electricity) Technological Services (Communications, AMC) Administrative Services (Transport, HK, Security) Legal and Professional Fees Provision / Written off for Bad Debt (0.1) CSR & Donation Others Total G&A Selling and Distribution Depreciation and Amortization Total Operating Cost 2, , Operating Profit INR/USD (Avg) INR/EUR (Avg) INR/GBP (Avg)

6 OPM Bridging Analysis: Q-o-Q FY19 Q1 vs. FY18 Q Q4FY18 Depreciation G&A S&D Delivery Cost Fx Q1FY19 Wage increase impact of ~200 bps fully baked in Q1 Delivery cost optimisation improvement efforts in progress Depreciation reduction due to annual WDV reinstatement impact Note: Bridging analysis in constant currency; impact of currency movement for revenue shown under Exc. rate S&D Exp. includes employee cost of onsite business development team 5

7 Balance Sheet & Other Updates Total Cash and Cash equivalents of INR 6,067 mm vs INR 6,002 mm for FY 18 Q4; Equivalent to INR per share vs INR for FY 18 Q4 Net operating cash flow in Q1FY 19 is INR (225.9) mm vs INR mm in Q4FY18 Capex during FY 19 Q1 is INR 47.8 mm vs INR 60.6 mm in FY 18 Q4 EPS Q1 Basic: INR 15.77; Diluted: INR Current book value per share of INR vs. INR FY 18 Q4 Pune Facility Consolidation and Fay expansion Proposed Pune plan will increase Area by 18 and seats by 26 (around 780 new seats) Annualized Opex savings expected in FY20; Fay capacity to be doubled by Q2 end Total Project capex estimated at INR 300 mm CSR Update Spent INR 12.3 mm for existing and new projects in Q1FY 19 related to India Areas covered: Health, Education, Skills development Total Life touched / benefited ~16k 6

8 Key Business Metrics Metrics FY 19 Q1 FY 18 Q4 FY 18 Q3 FY 18 Q2 FY 18 Q1 FY 17 Q4 FY 17 Q3 FY 17 Q2 FY 17 Q1 USD Currency Contribution* () EURO GBP Others Geographic Concentration* North America Europe Debtors (including unbilled) DSO 93 days 89 days & 81 days 81 days 88 days 85 days 78 days 74 days 80 days Client Concentration Top 10 contribution Billing Mix Managed Services Onshore revenue Staff Utilization (Delivery) Client Contribution* US$ 500k+ Clients (based on 12 month accrued US$ 1mm+ Clients revenue) US$ 5mm+ Clients *Other smaller currencies, geographies and client contribution not shown; & Q4 DSO corrected to 89 days 7

9 Revenue Mix Trends Consol $5.3 $4.2 $4.1 $3.7 $3.2 $3.7 $ $3.5 $ $9.2 $9.2 $7.7 $7.9 $8.7 $9.7 $9.4 $12.1 $10.5 FY17 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY18 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY19 Q1 Emerging (others) Emerging ($ 0.5 mm) Strategic (Top 10 ) Emerging Strategic (Top 10) clients Y-o-Y drop of -4.9 in USD & -5.2 in CC - Increase of 1 in CC after adjusting for the Client loss in FY18Q1 Emerging client Y-o-Y growth in USD by 18.1 and 15 in CC 8

10 Human Resources Update Headcount 8, ,005 8,942 8, , ,164 9,223 9,091 9, , ,095 7,709 7,497 7,762 7,740 7,592 7,825 7,746 FY15 FY16 FY17 FY18 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY19 Q1 Offshore Delivery Onshore Delivery Support Services Tech Services R&D BD Offshore Attrition FY15 FY16 FY17 FY18 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY19 Q1 9

11 This presentation contains forward-looking statements, inter-alia, to enable investors to comprehend company s prospects and take informed investment decisions. This report and other statements - written and oral - that we periodically make, contain forward-looking statements that set out anticipated results based on the management s plans and assumptions. We have tried wherever possible to identify such statements by using words such as anticipate, estimate, expects, projects, intends, plans, believes and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in assumptions. The achievement of results is, inter-alia, subject to assumptions, risks, uncertainties, including but not limited to our ability to successfully conclude and integrate (potential) acquisition(s) and general regulatory and economic conditions affecting the industry. Should known or unknown risks or uncertainties materialise or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated, expected or projected. We undertake no obligation to publicly update or revise any forwardlooking statements, whether as a result of new information, future events or otherwise. Further this presentation may also contain references to findings of various reports available in public domain. We make no representation as to their accuracy or that we necessarily subscribe to those findings. Figures for previous periods / year have been regrouped, wherever necessary. Thank You 10

12 Balance Sheet Abstract Shareholder's Funds Figures in INR millions. Particulars June 30, 2018 March 31, 2018 of Change Capital (0.1) Minority Interest 4 5 (16.7) Reserves and Surplus 11,928 11,666 2 Total Shareholder's Funds 12,313 12,053 2 Application of Funds Fixed Assets 3,403 3,435 (1) Deferred Tax Assets (net) 101 (31) (426) Net Current Assets & Investments (Liquid) 8,809 8,649 2 Total Application of Funds 12,313 12,

13 Financial Summary Quarterly View Metrics FY19 Q1 FY18 Q4 FY18 Q3 FY18 Q2 FY18 Q1 FY17 Q4 FY17 Q3 OPG revenue (USD mm) Revenue OPG revenue (INR mm) 3,519 3,611 3,399 3,309 3,332 3,315 3,247 Total revenue (INR mm) 3,704 3,781 3,405 3,450 3,413 3,243 3,359 OPM (INR mm) Profit EBITDA (INR mm) ,095 1,085 1,043 1,156 Operating EBITDA (INR mm) ,004 1,115 1,043 Net profit (INR mm) OPM () Margin EBITDA () Operating EBITDA () Net profit () EPS Basic Diluted

14 P&L Comparison Quarterly View Operating P&L FY19 Q1 OPR () Operating Revenue 3,519 3,611 3,399 3,309 3,332 Cost of Revenues Delivery and Support Employees Cost 1, , , , , General and Administrative Expenses Facilities (Rent and Electricity) Technological Services (Communications, AMC) Administrative Services (Transport, HK, Security) FY18 Q4 OPR () FY18 Q3 OPR () FY18 Q2 OPR () FY18 Q Legal and Professional Fees Provision / Written off for Bad Debt (0) CSR & Donation Others Total G&A Selling and Distribution* Depreciation and Amortization Total Operating Cost , , , , Operating Profit *Selling and Distribution includes employee cost of onsite business development team. Figures in INR millions. OPR () 13

15 Key Business Metrics Quarterly View Metrics FY19 Q1 FY 18 Q4 FY 18 Q3 FY 18 Q2 FY 18 Q1 FY 17 Q4 FY 17 Q3 FY 17 Q2 FY 17 Q1 USD Revenue Growth () Constant Currency USD Currency Contribution* () EURO GBP Geographic Concentration* Debtors (including unbilled) Others North America Europe ROW DSO 93 days 89 days & 81 days 81 days 88 days 85 days 78 days 74 days 80 days Client Concentration Top 10 contribution Billing Mix Managed Services Onshore revenue Staff Utilization (Delivery) Seat Count 8,900 8,919 8,904 8,926 8,941 9,035 9,023 8,632 8,626 & Q4 DSO corrected to 89 days 14